Japan’s JFE to take stake in JSW: reportsril
16 Apr 2010
Japan's JFE Holdings is in advanced talks to take a 14.06-per cent stake in India's JSW, which is in need of cash to fund its expansion plans, according to The Economic Times newspaper.
The two companies are in the process of finalising the terms of a share issue by JSW to its founders, Sajjan Jindal and his family, and JFE, according to the report which cited an unidentified person familiar with the development.
The report said Jindal and his family would invest about Rs25 billion to retain their current 42 per cent holding.
The paper said both JFE and JSW officials declined comment.
JFE will invest about Rs50 billion to buy a 14.06 per cent stake, according to a person familiar with the development.
According to analysts, it the deal were to be clinched it would be for the first time that a large Indian company would yield control and become partner of its rival. A similar transaction that happened last year, they say, saw Uttam Galva Steel sign a deal with ArcelorMittal, however, they point out the major difference here is the size of the Indian company, JSW which is much bigger than Uttam Galva.